Mastery Problem Hurst Company’s beginning inventory and purchases during the fiscal year ended December 31, 20-2, are shown. Units Unit Price Total Cost January 1, 20-2 Beginning inventory 1,500 $10.00 $15,000 January 12 1st purchase 500 11.50 5,750 February 28 2nd purchase 600 14.50 8,700 June 29 3rd purchase 1,200 15.00 18,000 August 31 4th purchase 800 16.50 13,200 October 29 5th purchase 300 18.00 5,400 November 30 6th purchase 700 18.50 12,950 December 21 7th purchase 400 20.00 8,000 6,000 $87,000 There are 1,200 units of inventory on hand on December 31, 20-2. Required: 1. Calculate the total amount to be assigned to the cost of goods sold for 20-2 and ending inventory on December 31 under each of the following periodic inventory methods: Cost of Goods Sold Cost of Ending Inventory a. FIFO $fill in the blank 1 $fill in the blank 2 b. LIFO $fill in the blank 3 $fill in the blank 4 c. Weighted-average (round calculations to two decimal places) $fill in the blank 5 $fill in the blank 6 2. Assume that the market price per unit (cost to replace) of Hurst’s inventory on December 31 was $18. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods: a. FIFO lower-of-cost-or-market $fill in the blank 7 b. Weighted-average lower-of-cost-or-market $fill in the blank 8 3. In addition to taking a physical inventory on December 31, Hurst decides to estimate the ending inventory and cost of goods sold. During the fiscal year ended December 31, 20-2, net sales of $100,000 were made at a normal gross profit rate of 35%. Use the gross profit method to estimate the cost of goods sold for the fiscal year ended December 31 and the inventory on December 31. Cost of goods sold $fill in the blank 9 Estimated inventory $fill in the blank 10

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter13: Accounting For Merchandise Inventory

Section: Chapter Questions

Problem 1MP: Hurst Companys beginning inventory and purchases during the fiscal year ended December 31, 20-2,...

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Mastery Problem

Hurst Company’s beginning inventory and purchases during the fiscal year ended December 31, 20-2, are shown.

		Units	Unit Price	Total Cost
January 1, 20-2	Beginning inventory	1,500		$10.00	$15,000
January 12	1st purchase	500		11.50	5,750
February 28	2nd purchase	600		14.50	8,700
June 29	3rd purchase	1,200		15.00	18,000
August 31	4th purchase	800		16.50	13,200
October 29	5th purchase	300		18.00	5,400
November 30	6th purchase	700		18.50	12,950
December 21	7th purchase	400		20.00	8,000
		6,000			$87,000

There are 1,200 units of inventory on hand on December 31, 20-2.

Required:

1. Calculate the total amount to be assigned to the cost of goods sold for 20-2 and ending inventory on December 31 under each of the following periodic inventory methods:

	Cost of Goods Sold	Cost of Ending Inventory
a. FIFO	$fill in the blank 1	$fill in the blank 2
b. LIFO	$fill in the blank 3	$fill in the blank 4
c. Weighted-average (round calculations to two decimal places)	$fill in the blank 5	$fill in the blank 6

2. Assume that the market price per unit (cost to replace) of Hurst’s inventory on December 31 was $18. Calculate the total amount to be assigned to the ending inventory on December 31 under each of the following methods:

a. FIFO lower-of-cost-or-market	$fill in the blank 7
b. Weighted-average lower-of-cost-or-market	$fill in the blank 8

3. In addition to taking a physical inventory on December 31, Hurst decides to estimate the ending inventory and cost of goods sold. During the fiscal year ended December 31, 20-2, net sales of $100,000 were made at a normal gross profit rate of 35%. Use the gross profit method to estimate the cost of goods sold for the fiscal year ended December 31 and the inventory on December 31.

Cost of goods sold $fill in the blank 9

Estimated inventory $fill in the blank 10

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